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The marketing philosophy is the approach adopted by companies to meet customer needs,
increase sales, maximize profit and beat competition. There are 5 marketing principles which
are implemented and performed by organizations.
5 Marketing Concepts
Production Concept
The definition of production-" Consumers are going to prefer goods that are available
and extremely affordable. This principle is one of the oldest brand strategy guidelines
for sellers.
Organizations that follow this approach run a considerable risk of concentrating too
narrowly on their own activities and losing sight of the real target.
Most of the time; the idea of output will lead to myopia in marketing. The management
focuses on improving productivity in production and distribution.
Although the idea of output is still a useful theory in some circumstances.
Product Concept
The product concept holds that the consumers will favor products that offer the most in
quality, performance and innovative features.
Here; under this concept,
Marketing strategies are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies,
sometimes the only part. Targeting only on the company’s products could also lead to
marketing myopia.
For example;
Suppose a company makes the best quality Floppy disk. But a customer does really need
a floppy disk?
She or he needs something that can be used to store the data. It can be achieved by a
USB Flash drive, SD memory cards, portable hard disks, and etc.
So that company should not look to make the best floppy disk. They should focus to
meet the customer’s data storage needs.
Selling Concept
The philosophy of selling retains the premise-" consumers will not purchase enough of
the company's products unless they conduct a large-scale sales and marketing
campaign.
The management here focuses on creating sales transactions rather than establishing
long-term, sustainable relationships with customers.
In other words; the goal is to sell what the business is doing instead of doing what the
market wants. The aggressive system of sales carries very high risks.
The marketer believes in marketing principle that consumers will be coaxed into buying
the product will like it if they don't like it, they may forget their dissatisfaction and later
buy it again. Typically that is a very weak and wasteful conclusion.
The concept of sale is typically practiced on unsolicited goods. Unsought products are
consumers usually don't think about purchasing, such as insurance or blood donations.
Such companies need to be good at tracking out customers and marketing them for the
profit of a company.
Marketing Concept
The marketing principle maintains that "the achievement of corporate goals depends on
understanding the needs and desires of target markets and delivering the desired
satisfactions better than rivals do."
Managing ads here takes a "customer first" approach.
Under the concept of marketing, customer focus and value are the routes to make sales
and profits.
The marketing concept is a "sense and answer" philosophy centered on customers. The
challenge is not to find the right clients for your company, but to find the right products
for your clients.
The idea of marketing and the sales strategies are two extreme concepts and completely
different from one another.
Marketing philosophy is the overarching theory of marketing, and how to sell well to
consumers. It's a five-step strategy that is broken out into the principles of growth,
distribution, marketing, product, and societal marketing as an overall idea. All of these
are fundamental aspects of the overall marketing strategy and that overarching theory
is distinct from "the marketing method," which is just one facet of the overall equation .
The marketing philosophy is the idea that a business can tackle the challenge of meeting
consumer needs by producing a product that improves their lives, is useful and/or is
better and more effective than the products of competitors.
The definition of marketing is typically what people think of as "marketing," since it
includes brand branding, advertisement, and similar actions. Marketing concept is the
overarching term that covers every aspect of marketing, from product development to
distribution strategies, societal impact, and word-of-mouth advertisement.
Q2- What do you understand by Captive Consumers? What are their buying behavior ?
Discuss.
Captive markets are markets where potential consumers are faced with a severely
limited number of competitive suppliers; their only option is to buy what's available or
not make any purchases. Captive markets lead to higher prices for consumers, and less
diversity.
Captive customers are the customers who are “captured “by a product /vendor and are
resistant to use another product/vendor primarily because of the following reasons:
• The expense of moving to a rival is high This may be due primarily to the following
reasons — the consumer has invested a lot of time in adjusting to the product — the
customer's tastes and desires are not yet understood by the competitors — Consumers
have typically been using it for a long time and are hesitant to become accustomed to a
different products.
The costs involved in searching for a competitor is high. This is the case especially when
the customer searches for a new product/service.
The product/vendor has become a habit for the customer.
The captive client can be of great competitive advantage to any organization. The
companies can encourage the captive customers to purchase through discounts, loyalty
programs and various offers. Through adding new features to the product, they can also
improve the competitive advantage. The businesses that lose this competitive
advantage in cases where the cost of switching and searching is reduced by the
competitor.
Our customers rarely leave us, "an executive recently told me." I understand everything
about consumer management but it's not important to my company. The moment we
get them, they live, "he added with great conviction. For a brief moment the statement
of this executive seemed like customer paradise for his company had found a
mechanism that minimally invested customers to maintain. Together with others in a
variety of industries, this executive posits that minimal investment, if any, is required to
keep its customers from defecting. This idea is reinforced by the concept of "hostage
consumers," which is the notion that customers are held captive by the companies with
which they work as demonstrated by extremely low churn rates. Many businesses relate
longevity to satisfaction wrongly. "Prisoners are unable to leave the prison so why
bother to make their stay more comfortable," the thought goes.
There are multiple reasons why customers could become captive. One reason is the
result of the delight of customers from an amazing customer experience-a proposal of
total value that is so attractive that they will have no reason to shop for competing
products and services. The first explanation shows no trace of the second. Because of
monopolistic industries and unfriendly business regulations customers are often held
captive. The utilities industry is a classic example of a monopoly market in which the lack
of competition puts consumers at the mercy of their suppliers and prohibits them from
defecting to a rival. Certain reasons behind consumer captivity include:
Lack of quality competition – The quality of competitors is often so poor that despite the
desire to defect, a lack of suitable alternatives inhibits customers’ ability to do so.
Inertia – After years of poor customer service, customers have simply gotten used to the
idea that nothing will change, leaving them with no will to fight their company. In some
cases, customers perceive the product or service as a commodity and lack the desire to
take the time and effort to search for better alternatives.
High barriers to defection – Until the passage of legislation allowing consumers to leave
their mobile carriers with their mobile numbers, defecting from mobile carriers was
extremely challenging. Customers preferred to remain in a state of permanent
dissatisfaction with their carriers so long as they kept their mobile numbers rather than
defect and update their family, friends and colleagues on their number.
Lack of knowledge – historically a significant reason, the proliferation of the internet and
the speed of information flow is leading increasingly educated consumers to seek other
alternatives in growing numbers.
The assumption that consumers are hostage also causes companies to mistreat the very
people who keep them in business.
Captive customers regard their vendors as commodities for the products and services
they provide. They do not associate significant value with these products and services,
and expect this perception to reflect prices. If your company is facing a similar situation,
welcome to "hell on the goods" There is no consolation from price reduction in
"Commodity hell." You'll never please your clients, irrespective of the new offer or free
month of operation. Your margins would rapidly decrease causing you to cut costs. Your
customers will be disappointed and costly-very expensive-dissatisfied customers.
The captive clients are reluctant clients. They tend to complain excessively, and often
abuse the employees of their vendors. Every complaint comes at a price. As the length
of an irate customer's call increases, so do the costs. This cost increases when the
customer is transferred to a manager or supervisor. Calling to complain about the
company's inability to resolve the issue on the first, second or third call increases the
cost. On-going customers while other customers complain further increases the cost.
Captive customers use a disproportionate amount of resources and under these
conditions, enterprises generally cannot operate effectively and profitably.
In fact, captive customers tend to limit their purchase and use of the products and
services from their vendors. They don't have value associated with them. Opportunities
for cross selling and up selling will vanish. Prospects for growth dissipate. The fate of
new products, services and features is often doomed to failure before they come off the
ground.
When you think some or all of your customers are captive-change. Inertia aren't a long-
term success technique. Most notably, captive consumers are costly for both the low
price they pay for their goods, and the items they choose not to purchase. The only way
to treat captive clients is to set them free from their captivity. Design and deliver
attractive experiences that will amaze and delight you. Never give in to your customers.
Monopolies are slowly cracking.
Q3- Discuss the importance of consumer research for firms and their brands as well as
consumers. Also describe the steps in the consumer research process.
Consumer Research
Consumer marketing research is market research in which the intended customer's
interests, desires and purchasing habits are identified through direct observation, mail
surveys, telephone or face-to-face interviews and public sources (such as demographic
data). It is the systematic collection of data for actual and potential products / services
concerning the needs of customers. It sets out questions regarding your intended
market and finds relevant answers. Analysis on consumer marketing is needed to make
sure we deliver what consumers really want, and not what we think they want.
Consumer research primarily seeks to serve as the consumer's face. Marketing research
focuses on understanding the consumer as a person by focusing on exploring a product
or service's attitudes, needs, motivations, and behaviour. More generally, consumer
research helps provide important, accurate, credible and up-to-date information to a
business about its target customer. Consumer market research aims at recognizing,
knowing and assessing clients and their needs. It is also important to note that market
research involving customers is not explicitly associated with marketing research. In
fact, marketing research consists of both consumer and business-to-business research
and examines all aspects of a business environment, while consumer research is focused
solely on the consumer.
The purpose of consumer research:
To help businesses make better choices and achieve advantages over their rivals.
To help marketing managers or executives in the process of identifying and satisfying
customer needs, make numerous strategic and tactical decisions.
To remove some of the uncertainty by providing relevant marketing variables,
environment and consumer information.
In the absence of relevant information, the consumer response to marketing programs
cannot be reliably or accurately predicted
To provide insights that help guide the creation of a business plan, launch a new
product or service, optimize existing products and services and guide the expansion into
new markets.
Assess the portion of the population is most likely to buy a product or service based on
variables such as age, gender, location and income level
To expose the characteristics of a target market
To consider how consumers think about products on the market
To assess the consumer needs are relevant and whether those needs are met by
current products With an efficient marine environment.
Q4- Why are consumers’ needs and goals constantly changing ? What factors
influence the formation of new goals?
There are many reasons why marketing is constantly in need of change. Some of the
changes are implemented due to ineffective strategies, such as an ad that is not pulling
as well as expected. Other changes that result from the incorrect estimation of a target
audience which is the group of people most likely to use a product. External factors may
also drive the need for marketing strategies to shift. There are many other key reasons
why small businesses need to constantly change their marketing strategies
Changing Consumer Tastes
Customer tastes change constantly. Small businesses therefore have to constantly keep
up with the types of products and services that consumers want. A small consumer
product company can, for example, introduce a new drink with two flavors: strawberry
and blueberry. Nonetheless, they may need to incorporate other products that
customers want to introduce to increase market share. Alternatively, with these flavors,
customers may start buying other drinks. Consumers likewise taste shifting in terms of
product features, types, sizes, lengths, service and other elements. Most small
businesses carry out marketing surveys to keep track of what their consumers need and
want.
Countering Competitive Strategies
Small businesses are almost unable to remain complacent about their marketing and
advertising. A major reason for this is that a competitor may initiate a marketing
strategy that challenges the marketplace position of a small business. For example, a
major competitor may challenge the status of the small firm as the industry's leading
quality leader. They can hire a number of engineers, and improve their own products '
quality. The competitor may subsequently advertise its high-quality status, removing
some business from the smaller enterprise. In this situation, the small business must act
to ensure that its consumers still remain the leader in quality. To demonstrate the
superiority of its products, the company can start to do more comparative ads between
itself and the competitor. Small business owners may need to adjust the channels of
distribution to keep up with evolving competitive strategies, too. New competitors may
also pose a threat to market share and ongoing success for a company.
Product Life Cycle
Small enterprises must also change their marketing strategies during various stages of
the product life cycle. Once a product hits the market, there are four stages in the
product life cycle: introduction, growth, maturity and decay. Sales are often strong
during the stages of introduction and growth. Nevertheless, sales inevitably decline as
their goods reach maturity level for most companies in the industry. Hence, maintaining
sales growth becomes harder. In the maturity stage a small business may be forced to
lower prices, because customers may become more prone to quality. A company may
also need to better distinguish itself from the competitors in order to create its own
niche. For example, a small computer software company might create new features to
increase sales for its products. New uses for existing products can also be found at the
company.
Considerations
Factors outside, too, can cause small businesses to adjust their marketing strategies.
Such international variables may include the government, new laws, limited natural
resources, and technology change. A new packaging regulation, for example, may
require a small manufacturer of frozen dinners to change its packaging. The business
may need to start including more information on nutrition. Lack of natural resources can
force businesses to find replacements for manufacturing products. Changing
technologies can force certain products to become obsolescent. To order to remain to
business, small business owners might need to produce other goods. Press tastes among
consumers often shift which forces businesses to modify their advertising mixes or the
press combinations they use to market their products.
Q5- Describe personality trait theory. Give five examples of how personality trait can
be used in the consumer research.
Personality Trait Theory
If you ask people to describe their personalities, they usually identify themselves in
terms of the personality traits they incarnate. For starters, they may be anxious or laid-
back; highly social or pensionable. Scholars researching individual personality variations
invariably end up using the same approach; defining a collection of characteristics that
define and capture the various ways in which people differ from each other. Although
today there are multiple different models of personality traits, they vary primarily in the
number of traits that are identified; the fineness of the categories with which
researchers try to slice up personality, and not so much in what the major traits are
themselves. The influential "five factor model" created differently by Costa and McCrae
researchers, and (separately) by Goldberg, embodies relatively well the main traits
agreed upon. They are identified as
Extraversion
Describe the interests of people with respect to socialization.
Agreeableness
Describing whether people are willing or unable to satisfy others.
Conscientiousness
Describe how people take obligations and commitments seriously.
Emotional Stability
Describe how prone people are to nervousness and depression.
Openness to Experience
Describe how people are willing to try out new activities or endorse untraditional
agendas.
Research shows that measurements by adults on the five-factor model tests tend to
remain fairly stable over long periods of time (in some studies, up to 45 years!). This
suggests that while there is room for people to grow and mature as they age, once
formed, personality traits tend to remain consistent.
The explanation why personality traits tend to remain stable is that they primarily
reflect the influence of genetically determined temperaments (inborn conditions from
birth that set the tone for later personality; for example, when babies are "colicky" vs.
"easy"), as well as the influence of early formative experience. For example, the trait of
emotional stability is known to occur in families and can be an inherited susceptibility to
people who develop mood and anxiety disorders throughout their lives.
Personality traits of individuals affect how easy or difficult it is for them to take on
certain tasks. For example, finding success in a people-oriented sales job is far easier for
an extraverted person than having an introverted person succeed in that same job. On
the other hand, it is much harder for the extraverted people to work from home than
for the introverted people, who are typically much better at concentrating while alone
than the extraverted people. For this reason, information about your personality style is
something that you should take into consideration when making important decisions
about how you are going to live your life, such as what kind of work you end up doing,
or with whom you form relationships. It is critical that your personality structures do not
seriously clash with the type of work you do, or with the people you spend time with.
Discrepancies between your personality style and your environment can cause
uncomfortable issues.